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The Vietnam Competition and Consumer Authority (“VCCA”) recently issued its Annual Report for 2021 (“Report”). In this Client Alert, we outline the information provided by the VCCA on its activities related to the Law on Competition (2018) (“Law”) in 2021. While not addressed in this Client Alert, the Report also outlines other activities of the VCCA during this period including in respect of consumer protection. It should be noted that the VCCA is not the officially appointed regulator under the Law, but is acting on behalf of the Ministry of Industry and Trade (“MOIT”) pending appointment of the National Competition Commission (“NCC”). The Report is available in Vietnamese and English on the VCCA’s website - http://vcca.gov.vn/.
Economic Concentrations
The Report indicates that the primary activity of the VCCA with respect to the Law in 2021 was in relation to economic concentrations. In 2021, the VCCA received and processed 130 notifications of economic concentrations, including 38 transactions conducted outside of Vietnam. Of these, the VCCA carried out only a primary review for 127 of the 130 transactions notified and an official review of only 3 transactions.
Most of the notified transactions (109 out of 130) were acquisitions with the rest being mergers or joint ventures. The Report states that 3 of the notified transactions were determined not to be economic concentrations as defined in the Law. The Report also provides a breakdown of notifications by sector with real estate, services, automotive (including motorcycles) and energy being the most active sectors representing over half of all transactions in aggregate.
The Report provides details on a number of notified transactions. While all the described cases were cleared to proceed, in each case, either the relevant transaction took place outside of Vietnam or one or more of the participants were owned and/or managed by foreign entities. Of note, in two of the cases described, only one of the participants in the economic concentration had business activities in Vietnam.
Other Restrictive Competition Activities
Of particular interest was the Report’s description of the VCCA’s activities under the Law outside of economic concentrations. The VCCA states that it reviewed a number of sectors including beer, fertilizer, aviation, motorcycles, CNG, steel, construction materials of North-South expressway, marine logistics, and animal feed. The Report further notes that the VCCA received and handled a number of complaints relating to state management of competition. In relation to the urea fertilizer market, the VCCA reported that it coordinated with several agencies within the MOIT and other related agencies to inspect enterprises engaged in the production, trading, and distribution of urea fertilizer products nationwide.
The Report states that the VCCA reviewed a few cases of potential competition restriction behaviors; two of which were described:
- The VCCA responded to complaints related to the retail distribution and discount policies of Tupperware Vietnam Co., Ltd (“TWVN”). After requesting information from the complainant and TWVN, the VCCA determined that there were insufficient signs of TWVN abusing its dominant or monopoly position in the relevant market and that TWVN was not operating a multi-level marketing method.
- The VCCA investigated issues relating to a request by the People’s Committee of Ba Ria - Vung Tau for relevant enterprises and steel factories in the region to agree to transfer all generated steel furnace dust to a recycling plant of Zinc Oxide Corporation Vietnam Limited Company. The VCCA reported to MOIT to request the People’s Committee of Ba Ria - Vung Tau to follow the relevant law and policies and ensure the legitimate rights and interests of enterprises.
Exemptions
The Report describes three exemptions supervised by the VCCA during 2021:
- Decision No. 3872/QD-BCT issued in 2017 by the MOIT granting an exemption of the anti-competitive joint venture contract between Viet Nam Airlines Corporation and Societe Air France (Air France) in relation to air service on certain routes for 3 years. The MOIT extended the exemption in 2020.
- Decision No. 3105/QD-BCT issued in 2018 by the MOIT granting an exemption of the anti-competitive joint venture agreement between Jetstar Pacific Aviation Joint Stock Company (Jetstar Pacific) and Jetstar Asia Airways PTE. LTD (Jetstar Asia) in relation to air passenger service for a specific city pair route for 3 years.
- Decision No. 2327/QĐ-TTg issued by the Prime Minister in 2014 granting an exemption to the economic concentration related to the Viet Nam National Payment Joint Stock Company (NAPAS).
Unfair Competition
The VCCA reported that it does not have power to conduct investigations and settlement procedures under the Law, but still receives complaints relating to unfair competition, has reviewed cases and has made recommendations and clarifications.
Legislative Developments
The VCCA reported that in 2021, it worked with the MOIT on the development of the NCC Decree and reported that the proposed Decree is being reviewed with a view to replacing Decree No.98/2017/ND-CP on the functions, tasks, powers, and organization structure of the MOIT.
The MOIT proposes to continue to allow the implementation to be put into operation in the period up to 2030 the projects, or the completed part of the project with a total capacity of about 452.62MW and the planned projects have been approved by investors with a total capacity of about 1,975.8MW but not yet operated. The reason of this proposal, according to the MOIT, is to avoid legal risks, disputes, and compensation for investors.
The information provided in this email is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.
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